The simplicity and convenience of on-line
escrow payment service has made it so popular among
Internet users. Its in-built safeguards work for both
buyer and seller - making it a safe and inexpensive
payment option. However, the safety of escrow service
depends entirely on honest conduct of the escrow operator.
Awareness about common frauds associated with escrow
service and knowledge of safeguards can save you from
the clutches of unscrupulous escrow operators. Here's
an example of common escrow fraud
Fraudster in the guise of escrow operator
The fraudster sets up a fake escrow service, complete
with professional looking web-site and phony certificates.
It then joins hand with an unscrupulous auctioneer
to trap unsuspecting buyer.
The auctioneer puts on sale an attractive item, often
fictitious, with lucrative price tag. Buyer, unaware
of the trap, bids for the item and eventually wins.
The seller then suggests the fake escrow service for
monetary transaction.
Unsuspecting buyer agrees and sends money to fake
escrow service. The 'escrow operator' then starts
harassing the buyer after receiving buyer's money.
The fraudsters use various stalling tactics like asking
for more information, demanding clarifications and
sometimes even more money to clear the transaction.
Eventually, buyer gets frustrated and gives up any
hope of receiving the auction item or refund. If the
buyer is tenacious type who does not give-up easily
and involve law enforcing agents or police - the fraudster
closes down the 'escrow service' only to start a new
one under different name.
Safeguards to be taken for selecting
escrow service
- Use auction service of well-known sites (e.g.
eBay)
- Use an escrow service recommended by the online
auction site (for example, eBay recommends Escrow.com)
- If the seller wants you to use a specific escrow
company, ask why. Be sure to check it out carefully
- If anything seems fishy, find another escrow company
More Information on Fake Escrow Operators
For more information on fake escrow services, visit
http://www.sos4auctions.com
Fenton Smith, who created this site has listed over
100 sites that he labels scam escrow services - 47
of them are still active.
